Oil prices rose more than $2 a barrel on Thursday as investors reassessed the outlook for the US-Israeli war with Iran, while new attacks on tankers fed worries about oil supplies. Brent crude futures rose $2.3, or 2.43%, to $96.92 a barrel by 11:43 a.m. ET, while U.S. West Texas Intermediate crude increased $2.15, or 2.44%, to $90.27 a barrel. According to Reuters, the modest recovery comes after both benchmarks tumbled more than 8% to their lowest settlement levels since August 31 on Wednesday. "The situation in the Middle East is still unresolved and that's why there is some modest recovery in prices at the moment," said Giovanni Staunovo, commodity analyst at UBS.
The United Kingdom Maritime Trade Operations (UKMTO) reported multiple tanker attacks in the Gulf and in the Strait of Hormuz since Sunday. As reported by Investing.com, at least five vessels have reported incidents since Sunday, with the pace of attacks approaching October's record of 35 reported vessel incidents. The Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire in separate incidents after attempting to navigate unauthorised routes through the Strait of Hormuz. These developments highlight the critical nature of the Strait of Hormuz as a global energy transit corridor, where any disruption can significantly impact global oil supplies. Shipping companies must continue assessing individual voyages against evolving military and security threats, while insurance costs have gone sky-high since the start of the war on February 28, 2026.
Meanwhile, Saudi Arabia has issued warnings about potential danger near its oil export hub Yanbu, as Saudi Arabia is under attack from the Houthis. According to Investing.com, Saudi Arabia also issued warnings about potential danger near Yanbu, its Red Sea oil export hub, as Yemen's Iran-aligned Houthi militants continued attacks on the kingdom. These developments highlight the complex regional dynamics affecting oil transportation through the Strait of Hormuz, one of the world's most critical energy transit corridors. The geopolitical outlook remains uncertain following the U.S. midterm elections, where Democrats captured control of both houses of Congress from President Donald Trump's Republicans.
Despite the current rebound, oil prices remain well below geopolitical peaks, with crude having pushed toward $118 a barrel in late October. The US inventory report added support, showing crude, gasoline and distillate stocks fell as demand hit a one-year high. Traders are weighing the war's direction, with Eurasia Group cutting its odds of renewed US strikes to 60% from 65%, but also cutting the chance of a deal to 10% from 20%. Recovery in Middle East crude exports has not been matched by refined fuel supplies, which leaves prices vulnerable to volatility. The rebound followed a rout on Wednesday, when both benchmarks plunged more than 8% to their lowest closing levels since August 31, as U.S. midterm election results initially raised hopes of renewed diplomatic efforts to end the conflict.
